U.S. debt balloons to more than $40-trillion after doubling under Trump, Biden
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- U.S. total public debt reached $40.047 trillion on Tuesday per the Treasury Department — more than doubling from $19.95 trillion when Trump was first sworn in January 2017, with roughly one-third of the increase tied to COVID-19 pandemic spending under both Trump and Biden.
- 30-year Treasury yields hit their highest levels in nearly two decades as investors demanded greater compensation, days after a $25 billion 30-year bond auction cleared at the highest yield since 2021 and foreign demand for Treasuries declined over the past year.
- Treasury Secretary Scott Bessent announced a doubling of buyback sizes for 10- to 30-year Treasuries to at least $4 billion per operation in a bid to push long bond yields back down, after Trump reiterated his demand for lower interest rates at the White House.
- July's monthly deficit hit $432 billion — the fourth-highest in U.S. history — with tariff refunds turning customs receipts negative for a third straight month while Social Security and Medicare outlays continued to grow.
- Federal debt service costs of roughly $1.1 trillion annually now exceed Medicare spending to rank as the second-largest line item in the federal budget behind Social Security, having surpassed Pentagon funding for the first time in fiscal 2025.
- Trump's One Big Beautiful Bill Act will add another $4.7 trillion in debt per the Congressional Budget Office, and public debt has risen by $3.8 trillion since Trump took office in January 2025, following an $8.4 trillion increase during Biden's term.
- Maya MacGuineas, president of the non-partisan Committee for a Responsible Federal Budget, warned of a brewing fiscal crisis, noting the debt reached $40 trillion less than five months after crossing $39 trillion and quadrupled in less than 20 years.
Why it matters: The $40 trillion milestone lands as $1.1 trillion in annual interest costs have overtaken Medicare to become the federal budget's second-largest line item, crowding out discretionary spending and forcing Treasury Secretary Bessent to intervene directly in the long bond market — a fiscal stress that the Committee for a Responsible Federal Budget warns could erupt into a full-blown crisis absent tax increases or spending cuts.
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